Echo Energy Regulatory News (ECHO)

8 May 2015

Independent Resources plc

("IRG", the "Company" or the "Group")

Conditional Placing of 80,000,000 new Ordinary Shares ("the Placing Shares")

at a Placing Price of 1p per new Ordinary Share

Issue of Placing Warrants on 1 for 2 basis at exercise price of 50% premium to Placing Price

Highlights

· Two stage Placing to raise gross proceeds of £800,000 (before expenses)

· Proceeds used towards revised strategy to focus on reviewing advanced opportunities in Egypt, fund Ksar Hadada licence costs and general working capital

· Placing Warrants with exercise price at 50% premium to Placing Price may realise a further £600,000 for the Group

· Ksar Hadada licence extended to 7 August 2016 with opportunity to seek further one year extension

· The Board are working on a number of new opportunities in North Africa

Introduction

IRG (AIM: IRG), is pleased to announce that it has conditionally raised £800,000 (before expenses) through the issue of up to 80,000,000 new Ordinary Shares by way of a two-stage placing through Brandon Hill Capital Limited ("Brandon Hill") (the "Placing").

Investors in the Placing will also be issued with up to 40,000,000 Placing Warrants on the basis of one Placing Warrant for every two Placing Shares.

The Placing comprises 18,400,000 Placing Shares (the "First Placing Shares") that the Company expects to issue on 14 May 2015 ("First Admission"), together with 9,200,000 Placing Warrants (the "First Placing Warrants"), and 61,600,000 Second Placing Shares (the "Second Placing Shares") that the Company expects to issue, conditional on the passing of the Placing Resolution, on 28 May 2015 ("Second Admission"), together with 30,800,000 Placing Warrants (the "Second Placing Warrants"),

The Placing of the Second Placing Shares and Second Placing Warrants is conditional upon, amongst other things, shareholders passing a resolution to be proposed at a general meeting of the Company to be held at 11.00 a.m. on 27 May 2015 (the "General Meeting"). A circular (the "Circular"), containing information in relation to the Placing and convening the General Meeting, is expected to be sent to Shareholders on 11 May 2015. The Circular will be available on the Company's website at www.ir-plc.com in due course.

Background to and reasons for the Placing

Since completion of the Company's last equity fundraising in June 2014, IRG has received formal confirmation from the Consultative Committee on Hydrocarbons ("CCH") in Tunisia that its application for an extension to the Ksar Hadada licence ("KH") to become the operator had been approved. As a result of that approval IRG now holds 86.345 per cent of KH and is the operator.

The Tunisian approvals process was unfortunately very slow during 2014 and no CCH meetings were held from late 2013 until August 2014 causing major delays with many oil and gas projects in Tunisia.

However, since the approval was granted on 7 August 2014, IRG has undertaken a series of activities in relation to KH including:

· Re-assessing the KH opportunities from the perspective of the operator;

· Creating a work plan and budgets to fulfil the minimum work programme obligations;

· agreeing and executing a new joint operating agreement with its partners;

· formally meeting with ETAP to approve the budget and preparing in detail for the seismic survey and

· entered into a process to farm out part of its stake to a third party and that process underway at the date of this announcement.

The licence period for Ksar Hadada was recently extended by the CCH from 16 April 2016 to 7 August 2016.

The extension period represents the second renewal of the licence and therefore Independent Resources (Ksar Hadada) Limited may still, if necessary, seek an additional one-year extension of the licence until 7 August 2017.

Moreover, IRG has also closed its technical office in Rome and agreed terms with its remaining Italy based staff for their departures from the Group in order to reduce ongoing administrative costs.

Revised Strategy

IRG's wider strategy is to build a portfolio of Mediterranean basin based production assets. Its primary focus remains Egypt where there are significant opportunities for the Company, our management team has amassed significant operational experience and the Board has been reviewing potential transactions for a number of months. Our focus is on producing assets with upside where we believe that our management experience, combined with the application of modern production enhancement techniques and rigorous technical analysis provides the potential to significantly increase production.

The Board have been actively reviewing opportunities especially in Egypt being mindful of the economic parameters created from the sharp decline in crude oil prices since mid-2014. However, the Board believe that this has presented the Company with a good opportunity to access transactions, especially in Egypt where our CEO and other members of the management team have operated successfully in their careers with other companies. Greg Coleman worked as a petroleum engineer in Egypt for Amoco for a number of years and in an oversight role with BP on operational and Health, Safety, Security and Environmental issues, while both Brian Hepp (our chief operations officer) and Kevin Dean (our subsurface director) worked on the successful development of fields in the Gulf of Suez and Eastern Desert.

In order to fully progress some of these potential opportunities the Board has also been in discussions with potential strategic finance partners regarding financial arrangements for future transactions to acquire interests in producing assets.

Finally, as the Company has made significant progress in Tunisia and is currently advancing a number of potential investment opportunities in Egypt, the Group now requires additional working capital to progress these opportunities and maintain general working capital. The Placing contributes to this funding and we look forward to updating Shareholders on corporate developments following the revised strategy.

If the relevant Placing Resolution is not passed at the General Meeting, and if an alternative source of finance cannot be found in short order, IRG will have extremely limited working capital resources available and is unlikely to be able to continue as a going concern.

The Placing

IRG has conditionally raised approximately £800,000 before expenses from the Placing of 80,000,000 Placing Shares at a price of 1p per Ordinary Share (the "Placing Price").

The Placing Shares have been conditionally placed by Brandon Hill with institutional and other shareholders and comprise 18,400,000 First Placing Shares that the Company expects to issue on 14 May 2015 and 61,600,000 Second Placing Shares that the Company expects to issue, conditional on the passing of the Placing Resolution, on 28 May 2015.

Placees will also be issued with Placing Warrants to subscribe for additional Ordinary Shares at 1.50 pence (representing a premium of 50 per cent to the Placing Price) on the basis of 1 Placing Warrant for every 2 Placing Shares subscribed.

The Placing Price of 1 pence represents a discount of 46.8 per cent. to the closing mid-market price of 1.88 pence on 7 May 2015.

Application will be made for the Placing Shares to be admitted to trading on AIM. The Placing Shares will, when issued, rank pari passu in all respects with the existing Ordinary Shares, including the right to receive dividends and other distributions declared following First Admission or Second Admission (as applicable).

First Admission of the First Placing Shares is expected to occur at 8.00 a.m. on 14 May 2015. Following First Admission, the First Placing Shares will represent approximately 14.9 per cent. of the Company's enlarged issued share capital at that date and the total number of voting rights in the Company will be in respect of 123,543,330 Ordinary Shares.

Second Admission of the Second Placing Shares is expected to occur at 8.00 a.m. on 28 May 2015. Following Second Admission, the Placing Shares will in aggregate represent approximately 43.2 per cent. of the Company's enlarged issued share capital and the total number of voting rights in the Company will be in respect of 185,143,330 Ordinary Shares.

The allotment of the Second Placing Shares and issue of the associated Placing Warrants is conditional, inter alia, upon the Company obtaining approval of Shareholders at the General Meeting to grant the Directors authority and to disapply statutory pre-emption rights which would otherwise apply to the allotment of the Second Placing Shares and the issue of the associated Placing Warrants.

The net proceeds of the Placing are expected to be approximately £720,000 (before any of the Placing Warrants are exercised).

Issue of Placing Warrants

Under the terms of the Placing, warrants over new 40,000,000 new Ordinary Shares will be granted to placees on the basis of 1 Placing Warrant for every 2 Placing Shares.

Each warrant entitles the holder to subscribe for one new Ordinary Share at an exercise price of 1.5 pence per Ordinary Share, representing a premium of 50 per cent. to the Placing Price and the warrants may be exercised at any time until 28 May 2017.

If exercised the Placing Warrants will provide the Company with additional working capital.

Issue of Broker Warrants

Under the terms of the Placing Agreement, the Company has agreed to grant warrants to Brandon Hill over 4,000,000 new Ordinary Shares (representing 5 per cent of those Placing Shares allotted to investors introduced by Brandon Hill).

Each Broker Warrant entitles Brandon Hill to subscribe for one new Ordinary Share at the price of 1.20 pence per Ordinary Share, representing a premium of 20 per cent, to the Placing Price. The warrants may be exercised at any time until 28 May 2018.

Related party transaction

As part of the Placing it has been agreed that Roberto Bencini, a previous director of the Company, will be paid outstanding fees in the sum of £54,800 which he will use to subscribe for Placing Shares and Placing Warrants in the Placing. As Mr Bencini was a Director of the Company within the preceding 12 months, he is therefore regarded as a ''related party'' (as defined by the AIM Rules for Companies) of the Company.

The existing Directors consider, having consulted with Charles Stanley, the Company's Nominated Adviser, that the terms of this related party arrangement are fair and reasonable insofar as the Shareholders of the Company are concerned.

Current trading and prospects

On 30 September 2014 the Board announced interim results for the period to 30 June 2014.

These results confirmed a loss before taxation for the six months to 30 June 2014 of approximately £5.42 million. This included a non-cash impairment charge of approximately £4.65 million in respect of the Group's historical investment in its Italian coal bed methane projects.

At 30 June 2014 the Company had consolidated cash balances of approximately £1.34 million, reflecting the recent receipt of proceeds from a placing and open offer. The Group did not generate any trading revenues in the six months to 30 June 2014, nor has it generated any revenues in the period since then.

Since the announcement of the interim results the Board has continued to focus on development of the KH licence and evaluation of opportunities to invest in a producing asset in North Africa.

The Group has made preparations for the shooting of seismic on its Ksar Hadada onshore exploration permit in Tunisia. We have invested significant technical time evaluating the licence prospects and believe that we now have an improved understanding of how best to exploit the opportunity.

Since the Summer of 2014 our sector has experienced significant turmoil brought about by the decline in oil prices. Many projects are no longer viable at current market prices. We have carefully re-evaluated the economics for the KH licence which we believe remains viable at current oil prices and would remain so even if oil prices approached US$30 per barrel. Farm-out discussions on KH have been held with a number of parties and are ongoing.

In Italy we have served notice to the Regional Administrative Court in Bologna requesting the commencement of the hearing of our appeal in relation to the Rivara underground gas storage facility. We expect this case to be heard in the latter part of this year or early next year.

As noted in our interim results for the six months to 30 June 2014, we were unable to find an investment partner for the coal bed methane opportunities at Fiume Bruna and Casoni, in Italy, therefore, these opportunities will no longer be pursued. There is some very limited remedial work required at a previous drilling location on the Fiume Bruna permit which will be completed in forthcoming months.

As a result of the limited operational activity ongoing in Italy and our decision to focus on North Africa, the Directors no longer believe it appropriate to maintain a technical office in Rome and this was closed with effect from 31 March 2015.

Our focus for future investment is primarily on Egypt, where our management team has amassed significant operational experience. A number of potential transactions are under review and the forthcoming licence rounds should present opportunities.

Management have also been in discussions with potential strategic finance partners regarding financial arrangements for future transactions to acquire interests in producing assets and these continue.

By 31 December 2014 the consolidated cash balances of the Group had decreased to £0.44 million.

It is expected that the results for the 12 months ended 31 December 2014 will be announced in late May or early June 2015.

If the relevant Resolutions to approve the Placing are not passed at the General Meeting and if an alternative source of finance cannot be found in short order, the Company would have extremely limited working capital resources available to it at that point and would be unlikely to be able to continue as a going concern.

Use of Proceeds

The gross proceeds of the Placing will be utilised by the Company to:

· advance evaluation of business opportunities in Egypt, including diligence costs and cost of submitting bids in forthcoming licence rounds;

· cover short-term operating costs and preparation for the Ksar Hadada seismic programme and drilling programmes;

· contribute to working capital commitments of the Group; and

· pay transaction costs associated with the Placing.

Costs associated with the Placing are expected to amount to approximately £80,000.

The Board remains committed to ensuring that all costs are carefully managed, cash burn rates are kept as low as possible and fees paid to external advisers are kept to a minimum by using in-house capabilities.

Conversion of salaries and fees

The Directors are fully supportive of the Placing and have all indicated their desire to participate in the Placing. In order to reduce the erosion of the Group's cash reserves, certain Directors and members of the senior management team have indicated their willingness to convert historical salaries and consultancy fees due of approximately £170,000 on the terms of the Placing, with the Company settling any related personal income tax and National Insurance that falls due.

Since joining IRG, the executive Directors and key members of the management team have accepted salaries that have been at a significant discount to peers in the sector. The current Directors' remuneration arrangements entitle the entire Board to total salaries and fees of £325,000 per annum in aggregate. The Directors' willingness to apply their fees in subscribing for Ordinary Shares is further evidence of their commitment to creating value for all Shareholders.

The Company envisages that these arrangements may continue to be adopted to preserve Group cash reserves.

However, and in accordance with the AIM Rules, the Directors and members of the Company's senior management are not permitted to make a commitment to participate in the Placing until after the publication of the results for the financial year ended 31 December 2014, which is expected in late May or early June 2015. A further announcement regarding any such participation will be released in due course.

A general authority to issue up to New Ordinary Shares in connection with such potential future investments will be sought at the General Meeting.

Circular and Notice of General Meeting

An explanatory circular containing a notice convening a General Meeting of the Company to be held at the offices of Fieldfisher, Riverbank House, 2 Swan Lane, London EC4R 3TT at 11.00 a.m. on 27 May 2015 is expected to be sent to shareholders on 11 May 2015.

The business of the General Meeting will be to seek shareholder authority for the Directors to allot Ordinary Shares and to disapply pre-emption rights in connection with the issue of the Second Placing Shares and the Second Placing Warrants, together with the Broker Warrants.

In addition to seeking the authorities necessary to issue the Placing Shares, authority will be sought to allow IRG to satisfy other share issue requirements referred to above and provide the Directors with flexibility to issue some additional Ordinary Shares to raise additional working capital should demand exist. In particular, the Board is of the opinion that having such authority would place the Company in a stronger position to address any short-term funding requirements in a cost effective and efficient manner as well as to pursue other opportunities as they arise.

The Circular will be available to download from the Company's website at www.ir-plc.com in due course. The resolutions that will be proposed at the General Meeting are further described in the Circular.

For more information, please visit www.ir-plc.com or contact:

Definitions in this announcement are the same as those included in the Company's circular which is expected to be posted to shareholders on 11 May 2015 and which will be available on the Company's website at www.ir-plc.com in due course.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

References to the time in this document and Notice of General Meeting are to British Summer Time (BST).

PLACING AND ADMISSION STATISTICS